fixed private investment was up at a 6.5% annual rate, somewhat more than the 6.0% rate of increase reported last month; non-residential investment increased at a 4.7% rate, as investment in private structures increased 17.6% from the first quarter, a jump from the 16.1% increase approximated by the 2nd estimate; investment in equipment increased at a 3.3% annual rate, revised from 2.9%, and investment in intellectual property fell 1.5%, a greater contraction than the 0.9% reported by the 2nd reading...meanwhile, investment in residential property was up at a 14.2% annual rate from the first quarter to the second, more than the 12.9% rate of increase estimated at the end of August...as a result of these changes, growth in non-residential structures now contributed .45% to 2nd quarter growth, while residential added .40%, equipment added .18% and intellectual property subtracted .06% from 2nd quarter GDP...

the charge indicated in the contribution from state and local governments to 2nd quarter GDP by the 3rd estimate was also closer to the 1st estimate than the 2nd; instead of decreasing at a 0.5% rate as was reported at the end of August, investment and consumption spending by state and and local governments rose at a 0.4% rate in the 2nd quarter, just a fraction more than the 0.3% increase indicated from that government sector by the advance estimate of 2nd quarter GDP released in July....meanwhile, federal outlays decreased at a 1.6% rate in the 2nd quarter, which was the same decrease in federal spending reported in the second estimate...so while state and local governments finally made a small .05% contribution to GDP, the decrease in federal outlays took .12% away, leaving government as a drag on the 2nd quarter, much as it has been throughout this recovery…

the zero hedge bar graph above is a visual representation of how each of these major GDP components have impacted the quarterly result since the 2nd quarter of 2011, with the net quarterly change in GDP at an annual rate tracked by a black line; additionally, the pinkish shaded box includes a similar visualization of the differences between the first, second and third estimates for the 2nd quarter…if you click to enlarge it you’ll see that the dark blue in each bar represents the increase in personal consumption expenditures for each quarter, the red in each bar represents the change in fixed investment for that quarter, while the change in private inventories, the other investment category, is shown in green, with additions to GDP above the red dashed “0.00%” line and subtractions, representing a component that had contracted during the quarter, below it…in addition, the change in exports, which adds GDP when its growing and subtracts when it contracts, is shown in purple, while the opposite is true for a positive change in imports, shown in teal blue; they subtract from GDP when growing while a shrinkage of imports would be an addition to GDP and be shown above the red ‘0’ line…lastly, in orange, the graph shows the change in government consumption and investment, which has subtracted from GDP for every recovery quarter shown except for Q2 & Q3 of 2012…clearly, it’s been consumers in blue and fixed investment in red that have provided most of the growth over the last two years..

in addition to data on GDP and its components, this report included revised estimates of 2nd quarter inflation based on prices changes in national income & product accounts...the GDP deflator, which is used to convert nominal GDP changes into real dollars and hence is the broadest measure of inflation, increased at an annual rate of just 0.6% in the 2nd quarter; meanwhile, the deflator for personal consumption expenditures, which the Fed has targeted at 2.5%, has now actually fallen at a annual rate of 0.1% in the 2nd quarter, rather than unchanged as previously reported (it might be more appropriate to call it a PCE inflator)...the deflator for goods indicated 3.3% goods deflation at an annual rate in the 2nd quarter, and hence raised their value by that much in the GDP computation, while the deflator for services indicated an annual inflation rate of 1.6% for services, and hence lowered their contribution to GDP by that percentage..

3rd Quarter Real PCE to Date Suggests Weak Contribution to GDP

the key monthly release of the past week was also from the BEA, on Personal Income and Outlays for August; which gives us the first look at personal consumption expenditures for the month, which as we've seen has been the critical component of GDP during the recovery; it also includes data on personal income and disposable income after taxes, total personal savings and the national savings rate, as well as the price index for PCE, which the inflation gauge the Fed targets...a footnote tells us that the income data in this report reflects revisions from January to March due to the inclusion of the recently available first-quarter wage and salary data from the BLS...

overall, this month's report shows an improvement from recent months, although it's a source of some confused misreporting in the press...the BEA opens by telling us seasonally adjusted personal income for August increased by $57.2 billion, or 0.4 percent over July's level; however, what their news release fails to mention is that the $57.2 billion is an annualized figure, which means that August’s personal income gains, if extrapolated over an entire year, would increase annual personal income from $14,131.0 billion to $14,188.2 billion....in a similar manner, annualized disposable personal income (DPI), or income after taxes, increased by $56.2 billion to $12,522.8 billion, which was a 0.5% increase over July's DPI, making August income increases the largest since February...and unlike last month, when incomes from wages and salaries reported fell at a $15.3 billion rate, income from private wages and salaries increased at a $28.5 billion rate in August...even wages and salaries from government jobs increased at a $2.0 billion rate in August, in contrast to a decrease of $7.6 billion in July, despite being reduced by $7.3 billion in August and $7.7 billion in July due to sequester related furloughs...business proprietors incomes also rose by $5.0 billion in August, compared with an increase of $2.3 billion in July, and farm owners incomes we up at a $7.9 billion rate...in addition, personal rental income increased $7.6 billion in August, while personal income from receipts on assets (interest and dividend income) decreased $4.5 billion, in contrast to an increase at a $13.6 billion rate in July...although rental income and dividends account for less than 10% of all income, they have accounted for 25% of the increase in all earnings over the last 4 years...

the price index for personal consumption expenditures, based on 2009 = 100, was at 107.423 in August, nominally a 0.1% increase from July's 107.276 reading; the core PCE price index, which removes food and energy, was at 106.131, up 0.2% for the month...the year over year change in the headline PCE price index works out to an increase of 1.15%, and the year over year Core PCE price index, which the Fed has targeted at 2.50%, is at 1.23%, 0.1% higher than last month's 1.13% year over year level...as a result, real disposable personal income, which is DPI adjusted for PCE inflation, increased 0.3% in August, after being up 0.2% in July...real PCE, which is personal consumption expenditures adjusted for inflation using the PCE price index, increased 0.2% or $17.5 billion annualized in August, after being up 0.1% or $7.2 billion in July...thus for the 3rd quarter to date, real PCE has increased at a $24.7 billion rate, or at a 1.4% annual rate, which indicates a weak contribution to 3rd quarter GDP...our FRED graph below shows monthly real disposable personal income in blue and real personal consumption expenditures in red since January 2000, with the scale in chained 2009 dollars for both on the left; also shown in green is the monthly personal savings rate over the same period, with the scale as a percentage of DPI on the right….although it may appear from the graph that real disposable income has been accelerating over the past 13 years, real DPI below is not adjusted for increases in the population…on a per capita basis, real DPI is up just 18.3% over the span of this graph…and we already know the lion’s share of that has gone to the rentier class…

seasonally adjusted new orders for manufactured durable goods increased $0.3 billion in August to $224.9 billion, which as we've already mentioned was a 0.1% increase from July's depressed level; that means that August orders were still 8.0% below the new orders rate of $244.4 billion that we saw in June…there was a 0.7% increase to $67,909 million in new orders for transportation equipment, led by a 2.4% jump in new orders for vehicles and parts, however, that came on the heals of a 21.9% decrease in orders for transportation goods, as June transport orders came in at $86,387...new orders less transports, a popular metric which strips out volatile aircraft orders, were down 0.1% in August after a revised 0.5% decrease in July...new orders for defense aircraft, another volatile category, were down 11.8% after being down 3.1% in July; however they just account for $4,479 million on the books, less than 2% of the total...but there's not much volatile about new orders for computers and electronic equipment, which were down 3.4% in August after being down 2.4% in July; their new orders have now shrunk to $20,775 million from $22,069 million in June...but it's new orders for capital goods where the real weakness lies, down another 0.8% after being down 18.1% in July, which means new orders for capital goods at $84,285 million are now running nearly 19% below the June level of $103,795 million...even stripping out defense capital goods and aircraft, orders for so called core capital goods were at $68,379 in August, 1.9% below the June core capital goods orders of $69,695...were it not for new orders for new cars, new orders for durable goods would be a real train wreck...

our FRED bar graph below shows the month to month change of several of these durable goods categories, beginning in January of 2012...in each month, the red bar indicates the percentage change in overall new orders for durable goods for that month; next in each month, the blue bar indicates the percentage change for all orders for durable goods except aircraft and defense; followed by a bar in green which shows the change in new orders ex-defense; while in orange, we have a special consumer durables category, new orders for consumer durables ex transportation; finally, in violet, we have the change in new orders for all non-defense capital goods including aircraft, which is a fair proxy for what would be included in the equipment investment category of GDP...on that graph, the August / September 2012 change shows what should have happened if the change was just from abnormally volatile orders; after a downturn comes a rebound.. But after the downturn in July this year, new orders in August didn't do squat...

as bad as new orders were, it's the value of shipments of durable goods over July, August and September that will more closely impact third quarter GDP than new orders, which in many cases have lead times in months...overall, August seasonally adjusted shipments of manufactured durable goods increased $2.1 billion to $231.466 billion, which is a 0.9% increase over total July shipments of $229.353 billion, which was down 0.1% from June's level of $229,600...shipments of transportation equipment, up 1.5% in August to $69,738 million, led the increase, with shipments of motor vehicles up 1.9% driving that increase, as shipments of non-defense aircraft fell 5.1%...shipments of machinery were up 0.4% to $33,705 million after falling 1.5% in July, and shipments of computers and electronic equipment rose 1.3% in August to $27,576 million after a 1.1% contraction in July...overall shipments of capital goods also partially rebounded from a 1.9% pullback in July, as they rose 1.3% in August to $83,941 million; of that, shipments of non-defense capital goods rose 0.4% to $73,808 million after falling 1.4% in July...

seasonally adjusted inventories of durable goods were up 0.1% in August to a new record high of $379,084 million, which in turn followed the 0.3% increase in July...inventories of transportation equipment, up 0.3% and valued at $117,280 million, again led the increase, as transportation equipment inventories were also up 0.6% in July; inventories of motor vehicles increased 0.7% and inventories of non-defense aircraft were up 1.3%, while military aircraft and parts inventories fell 3.6%....excluding transportation inventories, all other inventories were virtually unchanged, as they fell by less than 0.1%...inventories of computers and electronic equipment were down 0.6% to $46,374 million, although inventories of communication gear rose 1.3%...inventories of electrical equipment, appliances, and components rose 0.5% after being up 0.2% in July, and overall capital goods inventories increased 0.1% as well, to $194,624 million, after increasing 0.3% in July...our FRED graph below shows the ratio of durable goods inventories to shipments in blue with the scale on the left, and the ratio of inventories to unfilled durable goods orders in red with the scale on the left…concerns that there has been an excessive build of inventories appear unfounded, at least for durable goods…

(the above is my weekly commentary that accompanied my sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

this report also found that 263.2 million Americans were covered by health insurance in 2012, up from the 260.2 million who were covered in 2011; this leaves 48.0 million people without coverage in 2012, statistically unchanged within the accuracy range of this survey from the 48.6 million uncovered in 2011...the percentage of us without health insurance coverage declined to 15.4% from 15.7% in 2011; the percentage of youngsters under the age of 18 who were not covered declined from 9.4%, or 7.0 million in 2011 to 8.9%, or 6.6 million in 2012, while the percentage of those in other age brackets was statistically unchanged...54.9% were covered by employment-based health insurance, at 170,877,000 statistically unchanged from the 170,102,000 covered by employers in 2011...another 50,903,000 were covered by Medicaid, which was also statistically unchanged from the year earlier Medicaid coverage...those covered by Medicare, however, increased to 48,884,000 in 2012 from 46,922,000 in 2011..

capacity utilization for total industry, which is the percentage of our plant and equipment that was in use during the month, rose 0.2% from 77.6% in July to to 77.8% in August, up from an operating rate of 77.2% in August of last year...the operation rate for manufacturing was at 76.1%, up from 75.7% in July, as capacity utilization for durables manufacturing rose from 75.5% to 76.2% and utilization for non-durables manufacturing rose from 77.3% to 77.4%...meanwhile, the operating rate for mining, which includes oil & gas rigs, slipped from 90.1 in July to 90.0% in August, and utilities operated at 74.7% of capacity in August, down from 74.8% in July and 75.8% a year earlier...over the year between August of 2012 and August of 2013, manufactures added 1.5% to their capacity, utilities expanded their plant base by 1.1%, and mining saw capacity growth of 4.2%...the FRED graph above shows the track of capacity utilization for total industry since 2007 in pink; note that it’s a percentage, rather than an index number like the other metrics tracked on the same graph

the seasonally adjusted food index rose 0.1% in August, while the unadjusted food index barely budged, rising from 237.001 in July 237.406 in August....food away from home rose 0.2% and was 3.0% higher than a year earlier while food at home rose at a seasonally adjusted 0.1% and was 1.0% higher than last August...prices for the cereal and baked good group were 0.3% higher than July and 1.3% higher than a year ago as bread rose 1.1% over the month and was 2.8% higher than last year while breakfast cereal fell 0.9 in August leaving average breakfast cereal prices 0.4% below last August….the meat, poultry, fish and eggs index was up 0.6% in August and 2.2% over a year, with bacon up 2.4% in August and 8.2% since last August; chicken parts also saw a 2.6% price jump in August, while frozen seafood fell 3.6%...dairy products rose 0.4% for the month as cheese prices rose 1.1% and fresh whole milk prices fell 0.3%; over the preceding year, milk rose 1.8% while the dairy index just rose 1.0%...in addition, fruits and vegetables increased by 1.2% in August and 3.6% over the past year as potatoes were up 3.0% for the month and 11.9% in a year while oranges, which were up 6.5% over the year, fell 2.5% in August...meanwhile, the prices for beverages fell 0.1% in August and 1.0% for the preceding year as the price of roast coffee was off 2.1% for the month and 7.6% year over year...but it was the large "other foods" category, which was down 1.0%, that brought the food index down, as sugars and sweets fell 1.1% for the month, frozen foods were 1.4% cheaper, and snack prices dropped 1.6% below the July average...

the seasonally adjusted energy price index declined 0.3% in August, while the unadjusted energy index fell 0.54%, from 251.370 in July to 250.011 in August...while fuel oil rose 1.5% for the month and gasoline fell just 0.1%, the overall index was dragged down by a 0.7% decrease in the energy services index, driven by a 2.3% decrease in piped natural gas prices and a 0.1% decrease in the cost of electricity...in an August 2012 to August 2013 comparison, gasoline prices were 2.4% lower, fuel oil prices were unchanged, while electricity prices rose 2.8% and natural gas utility prices saw a 4.8% price increase...

the cost of shelter, the largest component of the CPI at 31.638% of the total index, was up 0.2% in August and 2.4% year over year….the rent of one's primary residence was rose 0.4% for the month, home owner's equivalent rent was up 0.2%, while prices for lodging away from home fell 0.8%...medical care costs, up 0.6% for the month, were the other major driver of the rise in the August CPI; prices for medical care commodities rose 0.4% as prices for prescriptions, which had been slightly down this year, rose 0.8%, while medical care services rose 0.7% for the month as both inpatient and outpatient hospital services rose 1.9%...in contrast, the transportation index fell 0.2%, as prices for used cars fell 0.1% and prices for new cars were unchanged while the transportation services index fell 0.5% as air fares fell 2.0% and car insurance fell 0.1%....the education and communication index was also down 0.1% for the month, although year over year prices were 1.6% higher; tuition and fees were said to be down 0.2% in August, while telephones services were down 0.1% while postage and delivery fees were up 0.3%...meanwhile, the recreation index was unchanged, as prices of recreation commodities fell 0.3% on 0.9% decrease in TV prices and 1.0% lower prices for sports vehicles including bikes while recreation services price were up 0.2% as club dues and gym fees rose 0.4% and admissions to sports events rose 1.1%...finally, the clothing index, which accounts for just 3.462% of the CPI, was up 0.1% in August, as men's apparel was down 0.5%. women's apparel was up 1.0%, and footwear prices were unchanged…

our first FRED graph below shows the track of these major aggregate price indexes going back to 1997, when two of these composite indexes were reset; the rest represent recent price indexes based on prices from 1982 to 1084 = 100... the price index for food and beverages, which is 15.1% of the CPI, is shown in blue while the composite price index for housing, which includes rent or equivalent, maintenance, and utilities and accounts for 41.1% of the CPI, is in red...meanwhile, the apparel index in violet, has actually been falling since the 1990s until just recently...the rising orange line is the medical care composite index, which accounts for 7.144% of the CPI; it’s now at 426.866, an increase of more than fourfold from the index years; next, in light green, we have the volatile transportation index, which at 17.194% of the CPI reflects the gyrating cost of gasoline and fuel related costs of transportation services, moderated by the slow steady rise in the cost of vehicles; lastly, we have our two indexes benchmarked to 1997 prices equal to 100: education and communication price changes are shown in dark green and account for 6.695% of the aggregate CPI, while the recreation index, at 5.936% of the CPI, is shown in bright blue…

(the above is my weekly commentary that accompanied my sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

Is there a media blackout on the fracking flood disaster in Colorado?Hat Tip Bluedaze

We need the national news stations to go cover the environmental disaster that’s happening in Colorado right now.

This picture taken by a resident is from yesterday, 9/14/13

From an email.

I see you’ve noticed the underwater wells in Weld County,
Colorado. Amazing; we’ve emailed the Denver TV stations, other media,
and state and local politicians. We’ve sent pictures that our members
have taken. It’s like the media and politicians have been TOLD not to
say anything about it. There has been no mention of the gas wells on the
Denver newscasts either last night or this evening although all
stations have had extensive and extended flood coverage. You can see
underwater wells in the background of some of the newscast videos, and
yet the reporters say absolutely nothing.
Here’s a picture one of our members took yesterday in Weld County,
Colorado. We’ve got tons more on our website. Check it out. The tanks
are tipping and, in some cases, have fallen over. They have to be
leaking toxins into the flood waters. There have to be hundreds if not
thousands of underwater well pads in Weld County as a result of the
flooding.
Please publicize this in Texas since our media people and politicians have gone silent!https://www.facebook.com/EastBoulderCountyUnited
East Boulder County United
Lafayette, Colorado

UPDATE: The locals are very busy right now taking
calls from the media. So far no calls from the local media though. Last I
heard it is continuing to rain.
They reported to EPA emergency under report number 1060249.UPDATE: You can see more photos HERE. Another tank overturned and a fracking chemical warehouse that was flooded. I did not take the photos.UPDATE: From the Daily Camera:

Regulators say they agree these well sites could pose a
contamination risk, and they will get out to assess the damage as soon
as it’s feasible.
[...]
Lafayette-based anti-fracking activist Cliff Willmeng said he spent
two days “zig-zagging” across Weld and Boulder counties documenting
flooded drilling sites, mostly along the drainageway of the St. Vrain
River. He observed “hundreds” of wells that were inundated. He also saw
many condensate tanks that hold waste material from fracking at odd
angles or even overturned.
“It’s clear that the density of the oil and gas activity there did
not respect where the water would go,” Willmeng said. “What we
immediately need to know is what is leaking and we need a full detailed
report of what that is. This is washing across agricultural land and
into the waterways. Now we have to discuss what type of exposure the
human population is going to have to suffer through.”
A spokesman for the Colorado Oil and Gas Conservation Commission said
the agency is aware of the potential for contamination from flooded
drilling sites, but there simply is no way to get to those sites while
flooding is ongoing and while resources are concentrated on saving
lives.

Apparently all sides agree that there is a contamination risk. So I
hope the industry apologists will, at least, stop using my bandwidth
trying to convince us otherwise.FOLLOW UPDATES AT BLUEBLAZE

Colorado Flooding: Deaths, Dramatic Rescues, Fracking & Broken Oil Pipeline - by Diane Sweet, Occupy America, September 16, 2013Boulder County activists are concerned -- and rightly so -- with flooded oil and gas wells in northeast Boulder County, and southwest Weld County in Colorado.Residents in Colorado no doubt barely had a chance to catch their breath between the extreme drought conditions, and the torrential rains that led to devastating flash-flooding in many areas.Further complicating evacuations and rescue efforts, as well as
eventual recovery work; An uncooperative Mother Nature, broken oil and
gas industry pipeline, wells, fracking and operating oil and gas
facilities.

"Oil
drums, tanks and other industrial debris mixed into the swollen river
flowing northeast. County officials did not give locations of where the
pipeline broke and where other pipelines were compromised.
While the water levels in the South Platte appear to be receding
slightly, bridges over the South Platte have been closed as water
overflowed the bridges at least as far east as Morgan County.Oil and gas industry crews have been monitoring wells drilled into the flood plain east of Greeley in Weld County.
One pipeline has broken and is leaking, Weld County Emergency Manager
Roy Rudisill. Other industry pipelines are sagging as saturated sediment
erodes around the expanding river.Industry crews "are shutting in the lines, shutting in the wells," Rudisill said.
In a statement, Gary Wockner, of Clean Water Action, said "Fracking and
operating oil and gas facilities in floodplains is extremely risky.
Flood waters can topple facilities and spread oil, gas, and
cancer-causing fracking chemicals across vast landscapes making
contamination and clean-up efforts exponentially worse and more
complicated."

Indeed, why is there such a heavy presence of the fracking, oil and gas
industries in a floodplain? It's as if there was no forethought at all
to the potential complications of flash-flooding.

This is footage of the flooding that occurred in Longmont, CO, and was recorded the morning of the 13th around 9am. During the aerial surveillance it's noted that a sewage treatment plant is completely flooded in the town.An estimated 1,254 people are still unaccounted for in Colorado’s devastating floods, with at least four more inches of rain in the already-soaked Boulder expected Sunday. Five deaths have been blamed on the flooding, with a sixth person presumed
dead. Among the dead were a man and woman, both 19, who were swept away
while leaving their car. In fact, a helicopter surveillance mission
carrying Gov. John Hickenslooper and others was forced to divert twice
to rescue people waving below for help. The damage of the floods is
expected to cost an estimated $150 million in Boulder alone. Meanwhile,
New Mexico was also hit by heavy rains, with at least one death blamed on flash floods. Officials estimate that 1,500 homes have been destroyed and about 17,500 damaged so far.

More
than 85 fifth-graders from Louisville, Colorado were flown to safety by
the 4th Aviation Division Saturday. They had been trapped by rising
flood waters plaguing the state.They
were attending an outdoor education program at the Cal-Wood Education
Center in Jamestown when the town was cut off by floodwaters. To help
keep nervous families informed, the center’s Facebook page posted regular updates on how the children were doing.Denver’s Channel 7, the ABC News affiliate, posted a video on YouTube with interviews of people rescued in Lyons on Friday by the National Guard.Unable to keep up with the traffic to their news site, the Estes Park News Inc. used its Facebook page to keep residents informed with updates and images and videos sent in by residents, including this YouTube video.In
Jamestown, residents watched as "one by one, houses cracking off and
going into the creek," said Colleen Williams, chief EMS officer with the
Jamestown Fire Department. "But everyone was accounted for — that was
the best thing."

"There were almost 300 of them until Friday, when military helicopters evacuated all but about 20 from this mountain town northwest of Boulder.Jamestown lost one person, 72-year-old Joey Howlett, a beloved town fixture who was crushed inside his house by a mudslide Thursday morning."

With
floodwaters, mud and debris filling Boulder County sewer pipelines,
citizens began reporting water or sewage backing up into homes. In those
cases, people are being asked to evacuate because it's a health issue.

the widely watched August advance report, extrapolated from a small sampling of approximately 4,900 firms, will be similarly revised when more complete data is available next month; Census reports that seasonally adjusted aggregate retail sales were at $426.6 billion In August, which was an increase of 0.2 percent (±0.5%)* from the revised July total...the asterisk tells us that the Census Bureau does not have sufficient statistical evidence to determine whether sales rose or not in August, and that ±0.5% means with the data they have at hand, there's a 90% probability that the monthly change in August sales was between a decrease of 0.3% and an increase of 0.7%...unadjusted sales in August have reportedly risen 3.2%, from $429,115 million to $442,847 million, on sales numbers extrapolated from the sampling, as a broad spectrum of retail sectors see a seasonal increase in sales in August...

the seasonally adjusted data shows that without a big jump in car sales, August retail sales would have appeared even weaker...seasonally adjusted sales at motor vehicle and parts dealers rose 0.9%, from a upwardly revised $85,922 million in July to $88,762 million in August; the adjusted retail sales increase without those car sales was just $201 million, from July's $344,586 million to $344,787 million, or less than 0.1%...several major retail sectors saw their normal August sales decline: adjusted sales at building material and garden supply stores were off 0.9%, from $26,481 million in July to $26,234 million in August; sales at clothing and accessory stores were down 0.8%, from $21,159 million to $20,980 million, sales at stores specializing in sporting goods, books or music saw sales decline 0.5%, from $7,535 million to $7,499 million, and sales at general merchandisers were off 0.2%, from $54,879 million in July to $54,747 million in August...offsetting those sales declines, seasonally adjusted sales at furniture stores rose 0.9% to $8,535 million in August, sales at electronics and appliance stores rose 0.8% to $8,503 million, sales at health and personal care stores, most of which are conventional drugs stores, rose 0.6% to $23,917 million, and sales by non-store (online & mail order) retailers increased 0.5% to $37,915 million in August from $37,727 million in July; in addition, seasonally adjusted sales at bars and restaurants were up 0.3%, from $45,720 million in July to $45,976 million in August, and sales at gas stations were statistically unchanged, falling from $45,639 to $45,625 million in August...the adjacent bar graph, from Robert Oak at the Economic Populist, shows the dollar volume sales for each of these retail sales groups and the relative size of each; also note that the seasonally adjusted changes in August sales compared to those in July and vis-a-vis a year ago for each of the major retail groups covered in this report can be seen in the left side columns of the table above under the "August 2013 Advance" header...

unlike the previous occasions when we've highlighted this release, a large increase in student debt was not a factor in July's increase in non-revolving credit...unadjusted borrowing from the Federal government rose only $2.5 billion in July, from $569.4 billion in June, to $571.9 billion in July, as you can see in our bastardized table excerptfrom the second table in the Fed report which we've included below...with much of the new borrowing originating at depository institutions, where non-revolving consumer credit outstanding rose $5.3 billion to 561.5 billion, finance companies, where non-revolving credit outstanding rose $1.2 billion to $608.2 billion, and credit unions, where long term loans rose $2.6 billion to $214.1 billion, most reports indicated that it was a jump in auto loans that propelled the increase in non-revolving credit, which has certainly been borne out by the retail sales reports...what hasn't been getting much media attention, however, is that a significant portion of that increase in auto loans has been going to subprime borrowers..

… another report we want to take a look at this week is the July Job Openings and Labor Turnover Survey, even though the data is a month older than the August Employment report we covered last week...mirroring establishment survey, this report, commonly known as JOLTS, breaks down that net job creation figure we see monthly to include estimates of the number and rate of hires, those fired, laid-off, or otherwise separated, and the number of workers who quit their jobs by industry and by geographic region; in addition to the total number of job openings reported to the BLS in conjunction with this survey...

jobs separations are loosely divided into 3 categories; those who were fired or laid off, those who quit, and those separated for other reasons, such as retirement, death or disability...total seasonally adjusted job separations fell 119,000 in July, from 4,228,000 in June to 4,109,000 in July; while unadjusted separations rose 41,000 to 4,511,000...the manufacturing, retail trade, and health care sectors all saw small seasonally adjusted increases, while job separations in other industries declined...the separations rates, or the percentage of those who quit or otherwise lost their job in July as a percentage of those employed, fell to 3.0% in July from 3.1% in June...separations decreased on a seasonally adjusted basis in every region of the country except the Northeast, where they rose from 679,000 to 700,000 in July; however, the separations rate in the Northeast, rising from 2.6% to 2.7%, remained the lowest separations rate nationally...

among separations, the number of workers who quit their job in July rose by 63,000, from a seasonally adjusted 2,205,000 quits in June to 2,268,000 who quit in July...the unadjusted data shows an even larger increase in those who quit, jumping 191,000 in July to 2,608,000...the national quit rate, or those who quit as a percentage of those employed, rose from 1.6% in June to 1.7% in July; an improving quit rate is seen as a sign of worker confidence and hence an improving job market....quit rates are widely varied throughout different industries and areas of employment, ranging from a low of 0.6% for those working in government to as high as 3.3% for those working in accommodation and food services...there are also considerable regional differences; only 1.2% of workers in the Northeast quit their jobs in July, while the South saw a 1.9% quit rate...quitting rose in finance and insurance, professional and business services, and health care and social assistance in July, but fell in wholesale trade and resource extraction industries...

a seasonally adjusted 1,513,000 workers were either laid off or fired in July, down 89,000 from the 1,602,000 similarly terminated in June; the unadjusted data shows 47,000 less layoffs and discharges than June at 1,520,000 in July...seasonally adjusted estimates of layoffs and discharges were not available for individual industries, but raw data showed the largest percentage jumps in firings and layoffs in construction, where layoffs and firings rose from 150,000 in June to 180,000 in July, in education services, where such terminations rose from 57,000 in June to 68,000 in July, and in wholesale trade, where 52,000 were either laid off or fired in July, up from 33,000 in June...on the other hand, layoffs and discharges among information workers fell to 21,000 in July from June's level of 35,000...the national layoffs and discharges rate was unchanged in July at 1.1%; the percentage of the workforce fired or laid off fell from 1.2% to 1.0% in the West, while it was lowest in the Midwest at 0.9% and highest in the South at 1.3%..meanwhile, other workplace separations, ie, retirements, deaths, etc, fell by a seasonally adjusted 92,000 in July to 328,000; unadjusted data for this category similarly fell by 103,000 to 383,000 in July; the seasonally adjusted rate for these other separations fell from 0.3% in June to 0.2% in July...

(the above is my weekly commentary that accompanied my sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

note on the graphs used here

in March a year ago the St Louis Fed, home to the FRED graphs, changed their graphs to an interactive format, which apparently necessitated eliminating some of the incompatible options which we had used in creating our static graphs before then...as a result, many of the FRED graphs we've included on this website previous to that date, all of which were all created and stored at the FRED site and which we'd always hyperlinked back there, were reformatted, which in many cases changed our bar graphs to line graphs, and some cases rendered them unreadable... however, you can still click the text links we've always used in referring to them to view versions of our graphs as interactive graphs on the FRED site, or in the case where an older graph has gone missing, click on the blank space where it had been in order to view it in the new format....